U.K. Culture Secretary Oliver Dowden has begun the negotiations process that will determine how much the annual TV license will cost, the proceeds of which currently fund the BBC and Welsh free-to-air broadcaster S4C.
The license fee, which helps to keep the BBC commercial-free, makes up the bulk of the public broadcaster’s income, which, in the financial year 2019/20 was £3.5 billion ($4.6 billion). The license fee currently costs £157.50 ($208.6) per household per year.
The overall license fee model is guaranteed until the end of the BBC Charter period in 2027, but its reform from this point is something Prime Minister Boris Johnson’s government has promised to scrutinize. The BBC is now headed by director general Tim Davie, former boss of BBC Studios, who took over from Tony Hall in September.
The negotiations will decide how much public funding the BBC and S4C will receive for at least five years from April 2022. Dowden has asked the BBC to set out its financial needs in line with its public service broadcasting purposes.
“While Covid has brought out the best in the BBC, that hasn’t made it immune to some stark realities,” Dowden wrote in a column in U.K. newspaper The Telegraph on Tuesday. “The first is the utter transformation of the media landscape. The rise of Netflix, Amazon Prime and others has lobbed a grenade into the system – upending the way most of us consume our favourite shows.
“The second is the growing number of questions the BBC faces over some of its key commitments. Is the Beeb continuing to deliver value for money for licence-fee payers? Is it keeping the British public’s confidence when it comes to its impartiality, and does it truly represent the nation?”
Dowden has written to the BBC asking them for answers to six key questions. “Those include: how will it make savings, including around talent pay levels? How will the next licence-fee level affect the vulnerable, the elderly, and those on the lowest incomes? And how will it use its global might to fly the flag for Britain?,” Dowden wrote.
Dowden also wrote that the that “the BBC is just one piece of a bigger puzzle” that includes the other public service broadcasters ITV, Channel 4 and Channel 5, alongside STV in Scotland and S4C in Wales.
As part of a larger review of the U.K.’s public service broadcasting system, a panel of independent professionals has been set up. The panelists include Jane Turton, chief executive of All3Media; Sophie Turner Laing, former CEO of Endemol Shine Group; Baroness Bertin, senior advisor at British Telecom; Miranda Curtis, non-executive director of Liberty Global; Robbie Gibb, former head of BBC Westminster and director of communications at No. 10; Lord Grade of Yarmouth, former chief executive of Channel 4, chair of the BBC Board of Governors, and executive chair of ITV plc; Andrew Griffith, Member of Parliament for Arundel and South Downs, former chief operating officer and chief financial officer for Sky Group plc and chair of the Royal Television Society 2017 Cambridge Convention; John Hardie, former CEO and editor-in-chief at ITN; Nicola Mendelsohn, vice president for Europe, Middle East and Africa at Facebook; and Samir Shah, chief executive of Juniper Productions, chair of the Museum of the Home and former deputy chair for the V&A.
Panellists will be expected to look at the impact of technology on audience habits and expectations, as well as the financial sustainability of broadcasters and the overall structure of the domestic television market, including video streaming.
“Public service broadcasting is woven into the cultural fabric of the U.K., but to remain relevant and meet people’s needs in the digital age, it must evolve,” Dowden said. “We are today taking a step forward in our roadmap for reform of the BBC and beginning negotiations to agree the cost of a TV license from 2022 so that it offers fee payers the best value for money.”
Lord Grade said: “Our public service broadcasting remit has served the nation well for over 80 years but the time has come to review its relevance for the digital age and maybe redefine it.”
The license fee remains a controversial issue in the U.K. Various polls conducted this year alone have demanded that the fee be reformed, and in recent weeks, many members of the public have refused to pay up. Not paying the fee is currently a criminal offence, but this is under review.
“The government continues to actively consider the responses to the public consultation on whether the criminal sanction remains appropriate for TV licence fee evasion given ongoing concerns about whether it is unfair and disproportionate,” is the most recent statement on the subject from the U.K.’s Department for Digital, Culture, Media & Sport.
There have also been persistent suggestions that the BBC switch to a subscription model, but Davie, in his very first speech as director-general, ruled it out. “For the avoidance of doubt, I do not want a subscription BBC that serves the few,” Davie had said. “We could make a decent business out of it, and I suspect it could do quite well in certain postcodes, but it would make us just another media company serving a specific group.”